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A British departure from the EU would sharply reduce the pace of housing transactions, taking up to 10 per cent out of sales volumes in UK cities and as much as 15 per cent in central London, research has found.

Analysis by the Treasury has so far focused on Brexit’s impact on house prices, suggesting that falls in value of 10-18 per cent would follow the “economic shock” of a UK departure.

But separate work by housing market analysts Hometrack looking at the impact of external events on the UK housing market over 20 years found that such shocks tend to hit transaction levels harder than prices — and that central London bears the brunt.

Richard Donnell, Hometrack research director, said: “Transactions are already down in the central London market by almost 20 per cent in the last two years so the impact of a vote to leave is likely to further impact activity in a market which has already been cooling [because of] tax changes and a lack of relative value.”

Sales volumes in central London have dropped as much as 15 per cent on four occasions in the past 20 years, including after the collapse of the hedge fund Long Term Capital Management in 1998 and the dotcom bubble in 2000. The eurozone crisis of 2011/12 had less impact on the market — it coincided with a recovery in activity after the financial crisis.

The top end of the capital’s housing market in central neighbourhoods was more vulnerable to global and financial factors than the wider London market, which more closely tracked domestic demand. Sale volumes in the highest-value areas dropped 25 per cent after the dotcom bubble and the September 11 2001 attacks. A fall of 27 per cent was triggered by the Iraq war in 2003.

. . . a vote to leave is likely to further impact activity in a market which has already been cooling [because of] tax changes and a lack of relative value.

Richard Donnell, Hometrack research director

The research singled out Manchester, Leeds and Birmingham as UK cities that stood to benefit most from a vote to remain part of the EU, since demand for housing was on the rise and there was more room for further rises in house prices.

Mr Donnell said: “A vote to remain will have the greatest upside for house prices and transactions in regional cities where the recovery has been more shortlived and affordability less stretched than in southern cities.”

The Hometrack index for April found house prices rising in UK cities at 10.4 per cent, against 6.6 per cent a year ago when the outcome of the general election appeared uncertain.

The change to stamp duty rules on April 1, when a surcharge was introduced on second homes and buy-to-let, triggered a spike in sales in the month, with annual rates of growth rising in 15 of the 20 UK cities monitored, compared with April 2015.

Cambridge, London and Bristol saw the sharpest rises in annual growth rates, with 15.8 per cent, 14.4 per cent and 13.8 per cent respectively. Aberdeen was the only city in the top 20 to see a drop in annual growth rates, falling 6.1 per cent, following the sharp decline in the oil price in 2015.